The hopes of clients of the infamous Ukrainian brokerage Forex Trend were dashed to pieces earlier this week after the website of the firm went dark. According to a support message from Incapsula, the company which maintains the server, the site might have been subjected to a DDoS attack and the operator does not intend to continue maintaining the operations of the domain.
Recently, New Zealand regulators published a warning about the ownership of the company registered in Kiwi-land. The announcement by the regulator detailed that the company was insolvent and a liquidator was soon to be appointed.
The website has shut down without entering into contact with the public earlier this week. Investors with the ailing brokerage didn’t have to whom to turn to with their concerns. However, as of today the website returned to its previous operational state suggesting that a DDoS attack could have indeed been the sole reason for the temporary outage.
No substantial new information for clients has been posted.
The Russian and Ukrainian markets have recently come at the center of the attention of forex traders in the region. A number of brokers have become notoriously famous for operating in a Ponzi-like fashion. The site of Forex Trend continues to advertise excessive returns, while clients are anxiously awaiting for their withdrawals to resume.
Did COVID-19 Save the Forex Industry?Go to article >>
Aiming to bring more clarity to clients of the brokerage, Finance Magnates’ reporters reached out to the Ukrainian self-regulatory organization (SRO) UCRFIN.
A representative of the watchdog shared, “During the past year the Ukranian forex market has bumped into a number of negative trends and occurrences, which was associated with a couple of big brokers leaving the market.”
“While in some cases this was a direct result from the economic conditions within the country prompting investors to pull out their savings. In other cases the bankruptcy of a number of brokers was due to much more trivial reasons,” he added.
The message from the Ukrainian SRO does not bode well for customers of the brokerage. Hopes of clients to recover any funds with the help of New Zealand regulators are unfounded. The New Zealand regulatory framework is not designed to protect the deposits of foreign investors in companies which are registered in the country.
Bear in mind the fact that the firm is registered in New Zealand as a financial services provider does not mean that it is regulated. Only companies which hold a New Zealand Financial Markets Authority (FMA) license are regulated. Even then, the watchdog is responsible for overseeing the companies to align their practices with the interests of Kiwi residents.
Most of the clients of Forex Trend are from Russia and Ukraine, since this is the area where the firm has been actively looking for new clients.